"Locality pay," designed to edge federal salaries closer to the levels paid in the private sector, was created as an incentive for government employees who work in the United States -- and that has made it a sore point with numerous Foreign Service officers.
When State Department diplomats leave Washington for an overseas post, their pay drops about 16 percent under current rules. The American Foreign Service Association contends that the financial penalty needs to be addressed to maintain diplomatic readiness and morale.
"Why create a penalty for people going overseas?" asked John Limbert, the association's president.
Finding a way to address the locality pay gap has been a priority of the association in recent years, and Limbert is working again to renew interest in the issue on Capitol Hill and at the Office of Management and Budget.
Because of the locality pay restriction, the association calculates that a Foreign Service employee who joined the State Department in 1995 will lose $444,162 in pay and retirement benefits over the course of a typical 27-year career.
Limbert sees the issue as one of equity. As part of a recent pay change for federal executives, about 600 senior Foreign Service officers who are overseas have been deemed eligible for locality pay. In addition, the intelligence agencies, such as the CIA, have used their special personnel authority to ensure that agents and others do not take a cut in base pay when sent abroad, Limbert said.
He acknowledged that winning an exception for State Department employees overseas -- 7,000 to 8,000 people -- is a hard sell in Congress and at OMB. Critics point out that the State Department has been able to staff posts abroad, even with the pay gap. Some critics also contend that "the striped-pants set" lives a good life abroad, even though more and more Foreign Services officers are being assigned to hardship posts.
Limbert acknowledged that he faces an uphill climb. "The Foreign Service, as a culture, has people who are in it for more than money. People do go overseas and go to Baghdad and do the work, even with a pay cut," he said.
But, he said, "does it have to become a disaster before you do something about it?"
The association points to a 2002 report by the Government Accountability Office, the congressional auditor, that found pay disparity is causing some problems in staffing hardship posts overseas.
The big sticking point is the cost to expand locality pay to overseas duty -- probably about $110 million initially, Limbert said. The State Department does not have funds to cover the cost.
But Limbert promises "to make ourselves as obnoxious as possible" about locality pay, which Congress authorized in 1990 as an extra adjustment to the general pay raise provided to most federal employees every year.
Limbert broached the issue with Secretary of State Condoleezza Rice when she held her first "town hall" meeting with employees Jan. 31. Rice said the department "will continue to work on that issue. . . . I do think it's an extremely important issue."
Energy Employees Lose Bid
An Alexandria company has won a facilities management contract at the Energy Department to perform work now done by 60 federal employees.
Logistics Applications Inc., a technical services firm that holds contracts at other federal agencies, won the bid, the Energy Department said. The contract will provide savings of $4.7 million over five years, the department said.
The department studied 91 positions -- held by electricians, mechanics and technicians -- in its Washington and Germantown headquarters operation. Only 60 of the jobs are filled, and the rest are vacant, the department said.
Of those 60 employees, half are eligible for a $25,000 buyout and retirement, the department said. The department said that it has arranged for a nine-month transition that it hopes will allow the other 30 employees to find jobs elsewhere in the agency or the government.
The National Treasury Employees Union, which represents part of the department's workforce, said the value of the contract awarded Logistics Applications is $26.8 million over five years.
The union faulted the job competition. Colleen M. Kelley, the NTEU president, said the contracting process allows companies to protest unfavorable decisions but does not extend that right to federal employees. She called for a level playing field that allows federal employees to file bid protests.